Study: US states need to reform budget practices

WASHINGTON (AP) — U.S. state governments face persistent financial challenges even as the improving economy has boosted tax revenue, a study says, highlighting the need for most states to reform their budgeting practices.

State budgets are being squeezed by rising pension and health care costs, federal spending cuts and overdue repairs and improvements to roads and bridges, according to a report released Tuesday by the State Budget Crisis Task Force. The nonprofit was formed three years ago and is co-chaired by former Federal Reserve Chairman Paul Volcker and former New York Lieutenant Governor Richard Ravitch.